Real Estate Commission in Ontario: How It Works and Who Pays

What's included

• Marketing your home on the MLS® System and realtor.ca
• Negotiating with buyers and their agents
• Handling showings and offers
• Closing coordination with the buyer's agent and your lawyer
• Professional staging advice (varies by agent)

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What sellers say

Flat fee MLS® prices

Plus 13% HST on Ontario listings; no tax on Alberta listings. The monthly plan can be cancelled any time.

What real estate commission costs on your Ontario home

Enter your expected sale price to see what a typical agent's commission would cost, including 13% HST, and compare it to a flat fee MLS® listing where you handle negotiations yourself.

What is real estate commission in Ontario?

Real estate commission is the fee you pay a listing agent to sell your home. In Ontario, it's a percentage of the sale price, usually between 4% and 6%, though it's always negotiable. The commission is typically split: the listing agent (your agent) gets half, and the buyer's agent gets the other half. Nothing about this split is set by law — both amounts are up for negotiation.

For example, on a $500,000 home, a 5% commission is $25,000. With 13% HST in Ontario, the total cost is around $28,250. That's split between two agents: each earns roughly $11,000–$14,000 (depending on the split).

How real estate commission works in Ontario

When you list with an agent, you sign an agreement that sets the commission percentage. The price of the home, the local market, the condition of the home and how quickly it sells all affect what commission an agent will accept. In a hot market, agents may accept lower commissions; in a slow market, they might ask for more.

Here's how the money flows:

1. Your home sells for an agreed price. 2. The buyer's lawyer collects the commission from the sale proceeds and holds it in trust. 3. The buyer's broker pays both the listing broker and themselves from that commission. 4. Your broker pays you the remaining amount after deducting your share of the commission and any other costs (e.g., advertising, lawyer, property inspections you agreed to cover).

The total commission is typically split 50/50 between listing and buyer agents, but that split is negotiable too.

How much is real estate commission in Ontario?

Commission is never fixed in Ontario. It's always negotiable. That said, most listings in Ontario fall in the 4–5% range. Some agents may ask for more in slow markets or for challenging properties; others accept less in hot markets or for high-value homes.

Examples on Ontario homes:

- $400,000 home at 5% commission: $20,000 + 13% HST = $22,600 total. Split: roughly $10,000–$11,300 per agent (after HST). - $600,000 home at 4.5% commission: $27,000 + 13% HST = $30,510 total. - $250,000 condo at 5% commission: $12,500 + 13% HST = $14,125 total.

Use the calculator above to see the cost on your expected price. Remember: the calculator shows typical costs, not what a specific agent will charge. Always ask and negotiate.

Does Ontario have HST on real estate commission?

Yes. Real estate commissions in Ontario are subject to 13% HST (Harmonized Sales Tax). The HST is added to the commission, not the sale price of your home.

For example: - Commission: $25,000 - 13% HST: $3,250 - Total you pay: $28,250

This means the total cost to a seller is 13% higher than the listed percentage. A 5% commission becomes an effective 5.65% cost when HST is included.

Note: HST does not apply to the sale price of your home itself. The home price is not taxed in Ontario (it's a resale), but the agent's commission is.

Can you negotiate real estate commission in Ontario?

Absolutely. Commission is entirely negotiable in Ontario. Everything is up for discussion:

- The percentage: agents often accept lower percentages for high-value homes, in fast markets, or when they know your home will sell quickly. - The buyer agent's commission: you can offer less to buyer agents and keep more of the commission. This sometimes discourages buyer agent participation, so be careful. - Flat fees: some agents offer a flat fee instead of a percentage, especially for homes in hot markets. - Marketing packages: you can negotiate what the agent covers (photography, virtual tours, paid ads, staging).

How to negotiate:

1. Interview multiple agents and ask each their commission rate and what they'll accept. 2. Mention competitors' rates if you've seen lower commissions in your area. 3. Point to your home's advantages (move-in ready, hot market, strong listing potential). Strong sales points give you leverage. 4. Offer incentives like a longer listing agreement to offset lower commission. 5. Negotiate in writing before you sign the agreement.

Don't assume 5% is the only option — it's a starting point.

Do you pay the buyer's agent commission in Ontario?

Not directly. As the seller, you set the buyer agent's commission in your listing agreement, and then you pay it from the sale proceeds. You're essentially offering a commission to buyer agents as an incentive to bring buyers.

For example: - Your home sells for $500,000. - You offered 2.5% to the buyer agent. - The buyer's brokerage collects $12,500 (2.5% of $500,000) from the proceeds and pays the buyer agent (minus their brokerage's cut).

Can you offer less to buyer agents?

Yes, you can offer 1%, 2%, or even 0% buyer agent commission if you want. However: - A lower offer discourages buyer agent participation, which limits your buyer pool. - Most Ontario homes offer 2–2.5% to the buyer agent. - Offering significantly less (under 1%) will likely hurt your sale and may even extend the time to sale.

The total commission (listing + buyer agent) is what matters. If you offer 2% listing + 2% buyer agent = 4% total, that's reasonable. If you offer 3% listing + 0.5% buyer agent, it may hurt your chances.

Is selling by owner right for you?

If the cost of real estate commission concerns you, selling for sale by owner or with a flat fee listing are options:

- Full-service agent: costs 4–6% + 13% HST, but they handle everything (marketing, showings, negotiating). - Flat fee MLS® listing: from $69.99 a month. You show and negotiate yourself, but you reach most buyers (they're on realtor.ca and the MLS® System). - Sell alone (private sale): no agent cost, but you miss the reach of MLS® and realtor.ca, and you handle all legal paperwork.

Flat fee MLS® is the middle ground: you reach buyers through professional channels but avoid paying agent commission.

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